Emulex Acquires 89 Percent Ownership Of Endace
Emulex Acquires 89 Percent Ownership Of
Endace
Company Welcomes Endace
Employees
and Extends Offer by 14
Days to March 12, 2013
COSTA MESA, Calif. and SUNNYVALE,
Calif., February 26, 2013 – Emulex Corporation (NYSE:ELX), the
leader in network connectivity, monitoring, and management,
and Endace
Limited (LSE:EDA), a leading supplier of network
visibility infrastructure products, announced today that
Emulex has acquired control of Endace and beneficial
ownership of 89 percent of the shares in Endace. Emulex has
also extended its offer period by 14 days, to 1 p.m. London
time on March 12, 2013 for remaining shareholders to submit
their shares to the Offer, and it is likely that Endace will
shortly be de-listed from trading on the London Stock
Exchange AIM.
“I’m excited to welcome Mike Riley and the Endace team to Emulex,” said Jim McCluney, chief executive officer (CEO) of Emulex. “The acquisition of Endace doubles our total addressable market and places Emulex in another high-margin, high-growth market, enhancing our ability to deliver industry-leading solutions to connect, monitor and manage high-performance networks.”
Mike Riley, CEO of Endace, now senior vice president and general manager of Endace, a division of Emulex, said, “We are delighted to become a part of Emulex, and this marks the next step in our strategy to become the market leader in network visibility solutions. The combined capabilities and technical depth of Emulex and Endace will enable us to deliver true end-to-end network management, expand our global reach and better support our customers.”
Emulex continues to urge Endace shareholders to submit share acceptances so that Emulex attains 100 percent ownership of Endace. Prior to 1 p.m. London time on February 26, 2013, Emulex declared the Offer wholly unconditional, and extended the offer period by 14 days in accordance with New Zealand law. Endace shareholders who submitted acceptances will be sent payment for their shares within seven days. Endace shareholders who submit shares as acceptances during the period of February 26 through March 12, 2013 will receive payment within seven days of receipt of their acceptances. Three directors selected by Emulex have joined the Endace board, and two of the previous directors of Endace have remained on the board. An application is being made to the London Stock Exchange to cancel the admission of the Endace shares on AIM, with such de-listing expected to become effective at 7 a.m. London time on March 27, 2013, in accordance with the AIM rules for 20 business days advance notice.
The receiving agent has reported that 195 acceptances have been received for a total of 13,629,988 shares, which is 89.55 percent of the 15,220,068 shares of Endace outstanding. The receiving agent reported that there are 27 non-acceptors who hold a total of 1,590,080 shares, which is 10.45 percent of the 15,220,068 shares of Endace outstanding. The largest non-acceptor is Elliott International, L.P, Liverpool Limited Partnership (Elliott), which owns 1,543,500 shares, which is 10.14 percent of the 15,220,068 shares of Endace outstanding. Elliott reported its ownership in a December 27, 2012 TR-1: Notification of Major Interest in Shares with the RNS, the company news service from the London Stock Exchange. The other 26 non-acceptors own an aggregate amount of 46,580 shares, which is 0.31 percent of the 15,220,068 shares of Endace outstanding.
The 89.55 percent of shares received by February 26, 2013 will be paid at the offer price of GBP 5.00 per share, for a total of GBP 68,149,940, which is equal to USD 107,413,766 at the reference exchange rate. The reference exchange rate of 0.6345 GBP per 1 USD is based on the actual rates obtained by Emulex for the currency conversion. The Endace employee stock options were purchased for GBP 4,555,929 which is equal to USD 7,180,777 at the reference exchange rate. If the remaining 10.45 percent of the Endace shares are submitted by the March 12, 2013 offer period end date, then an additional payment of GBP 7,950,400 will be made, which is equal to USD 12,530,934 at the reference exchange rate.
The Offer was made pursuant to the New Zealand Takeovers Code (NZTC), since Endace is a New Zealand company. The applicable NZTC rule requires, since Emulex declared the Offer unconditional, that Emulex provide its extension notice before the end of the offer period which had been set for 1 p.m. London time on February 26, 2013. The offer period has been varied to be until 1 p.m. London time on March 12, 2013 (unless extended further in accordance with the NZTC). The applicable NZTC rule provides that the Offer must remain open for at least 14 days after a variation notice has been sent. NZTC Rule 3(1) provides that a code company has 50 or more shareholders, and many of the NZTC rules apply only to such a code company, and after February 26, 2013 Endace has ceased to be a code company since its number of shareholders has become 28.
A copy of Emulex’s Offer, Endace’s response (including the Endace Board recommendation), and the Independent Adviser’s report prepared by Grant Samuel for Endace was sent to Endace shareholders and optionholders. Copies of those documents are available from the Endace web site (www.endace.com), and from the Emulex web site through the Emulex Form 8-K filed on December 21, 2012.
About Emulex
Emulex, the leader in network connectivity,
monitoring and management, provides hardware and software
solutions for global networks that support enterprise,
cloud, government and telecommunications. Emulex’s
products enable unrivaled end-to-end application visibility,
optimization and acceleration. The Company's I/O
connectivity offerings, including its line of ultra
high-performance Ethernet and Fibre Channel-based
connectivity products, have been designed into server and
storage solutions from leading OEMs, including Cisco, Dell,
EMC, Fujitsu, Hitachi, HP, Huawei, IBM, NetApp and Oracle,
and can be found in the data centers of nearly all of the
Fortune 1000. Emulex’s monitoring and management
solutions, including its portfolio of network visibility and
recording products, provide organizations with complete
network performance management at speeds up to 100Gb
Ethernet. Emulex is headquartered in Costa Mesa, Calif., and
has offices and research facilities in North America, Asia
and Europe. For more information about Emulex (NYSE:ELX)
please visit http://www.Emulex.com.
About Endace
Endace
provides world-leading network visibility infrastructure, which
is trusted by some of the world’s largest organizations to
accelerate their response to network and security problems.
Endace Intelligent Network Recorders
guarantee to capture, index and record 100-percent of
network traffic while scaling from 1 Gbps to 100 Gbps. EndaceVision is Endace's proprietary
web-based application that enables engineers to visualize,
search and retrieve network traffic from any Endace Recorder
anywhere across the network.
Endace's marketing
headquarters are in Sunnyvale, California. R&D is in
Auckland, New Zealand. Sales offices across the US, in
Reading, UK and Sydney, Australia provide support for
customers.
Quoted on London's AIM, the stock code is
LSE: EDA.L
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“Safe Harbor”
Statement
"Safe Harbor'' Statement under the
Private Securities Litigation Reform Act of 1995: With the
exception of historical information, the statements set
forth above, including, without limitation, those relating
to our acquisition of Endace Limited (Endace), contain
forward-looking statements that involve risk and
uncertainties. We expressly disclaim any obligation or
undertaking to release publicly any updates or changes to
these forward-looking statements that may be made to reflect
any future events or circumstances. We wish to caution
readers that a number of important factors could cause
actual results to differ materially from those in the
forward-looking statements. These factors include the
possibility that we may not promptly complete the
acquisition of Endace, may not obtain 100 percent ownership
of Endace, may not realize the anticipated benefits from the
acquisition of Endace on a timely basis or at all, and may
be unable to integrate the technology, operations and
personnel of Endace into our existing operations in a timely
and efficient manner. In addition, intellectual property
claims, with or without merit, that could result in costly
litigation, cause product shipment delays, require us to
indemnify customers, or require us to enter into royalty or
licensing agreements, which may or may not be available.
Furthermore, we have in the past obtained, and may be
required in the future to obtain, licenses of technology
owned by other parties. We cannot be certain that the
necessary licenses will be available or that they can be
obtained on commercially reasonable terms. If we were to
fail to obtain such royalty or licensing agreements in a
timely manner and on reasonable terms, our business, results
of operations and financial condition could be materially
adversely affected. Ongoing lawsuits, such as the action
brought by Broadcom Corporation (Broadcom), present inherent
risks, any of which could have a material adverse effect on
our business, financial condition, or results of operations.
Such potential risks include continuing expenses of
litigation, risk of loss of patent rights, risk of monetary
damages, risk of injunction against the sale of products
incorporating the technology in question, counterclaims,
attorneys’ fees, incremental costs associated with product
or component redesigns, and diversion of management’s
attention from other business matters. With respect to the
continuing Broadcom litigation, such potential risks also
include the adequacy of any sunset period to make design
changes, the ability to implement any design changes, the
availability of customer resources to complete any
re-qualification or re-testing that may be needed, the
ability to maintain favorable working relationships with
Emulex suppliers of serializer/deserializer (SerDes)
modules, and the ability to obtain a settlement which does
not put us at a competitive disadvantage. In addition, the
fact that the economy generally, and the technology and
storage market segments specifically, have been in a state
of uncertainty makes it difficult to determine if past
experience is a good guide to the future and makes it
impossible to determine if markets will grow or shrink in
the short term. Continued weakness in domestic and worldwide
macro-economic conditions, related disruptions in world
credit and equity markets, and the resulting economic
uncertainty for our customers, as well as the storage and
converged networking market as a whole, has and could
continue to adversely affect our revenues and results of
operations. As a result of these uncertainties, we are
unable to predict our future results with any accuracy.
Other factors affecting these forward-looking statements
include but are not limited to the following: faster than
anticipated declines in the storage networking market,
slower than expected growth of the converged networking
market or the failure of our Original Equipment Manufacturer
(OEM) customers to successfully incorporate our products
into their systems; our dependence on a limited number of
customers and the effects of the loss of, decrease in or
delays of orders by any such customers, or the failure of
such customers to make timely payments; the emergence of new
or stronger competitors as a result of consolidation
movements in the market; the timing and market acceptance of
our products or our OEM customers’ new or enhanced
products; costs associated with entry into new areas of the
server and storage technology markets; the variability in
the level of our backlog and the variable and seasonal
procurement patterns of our customers; any inadequacy of our
intellectual property protection and the costs of actual or
potential third-party claims of infringement and any related
indemnity obligations or adverse judgments; the effect of
any actual or potential unsolicited offers to acquire us;
proxy contests or the activities of activist investors;
impairment charges, including but not limited to goodwill
and intangible assets; changes in tax rates or legislation;
the effects of acquisitions; the effects of terrorist
activities, natural disasters, and any resulting disruption
in our supply chain or customer purchasing patterns or any
other resulting economic or political instability; the
highly competitive nature of the markets for our products as
well as pricing pressures that may result from such
competitive conditions; the effects of changes in our
business model to separately charge for software; the effect
of rapid migration of customers towards newer, lower cost
product platforms; possible transitions from board or box
level to application specific integrated circuit (ASIC)
solutions for selected applications; a shift in unit product
mix from higher-end to lower-end or mezzanine card products;
a faster than anticipated decrease in the average unit
selling prices or an increase in the manufactured cost of
our products; delays in product development; our reliance on
third-party suppliers and subcontractors for components and
assembly; our ability to attract and retain key technical
personnel; our ability to benefit from our research and
development activities; our dependence on international
sales and internationally produced products; changes in
accounting standards; and any resulting regulatory changes
on our business. These and other factors could cause actual
results to differ materially from those in the
forward-looking statements and are discussed in our filings
with the Securities and Exchange Commission, including our
recent filings on Forms 10-K and 10-Q, under the caption
“Risk Factors.”
ENDS